Monthly Archives: March 2005

So far, this legislative session has been fun. I passed five of my bills out of the House and they are now in the Senate. I made some tough decisions. I voted against some bills that have penalties too harsh for the action committed. I introduced a fair business bill, which has been difficult at times because I enjoy working with the other industries against it, and they have been supporters of mine. I have no regrets for any action I have taken because after analyzing an issue, I make my best decision based on the facts before me.

I enjoy politics. I am always thinking of ideas and strategies, as well as ways to overcome obstacles. I reflect on all the great people I met and think of people I want to meet. When I work, I am thinking. When I exercise, I am thinking. When I lie down before I sleep, I am thinking.

However, sometimes politicians need a brief escape from the problems being thrown at them, in addition to the challenges they face in their personal lives. Often times we are fighting within ourselves in determining our actions.

These are some of my thoughts:
1. Hoping my friend will get better from his ailment.
2. Appreciating my family and friends.
3. Work

This bill would protect our citizens from impersonators who harass and place their victims in fear of their safety. For example, I have learned that with the popularity of the Internet, there are many people victimized by impersonation. What worries me, is that many victims are women. I read a case where a man impersonated a woman because she rejected his advances on her. He made a website pretending to be the woman and lied on how she had a sexual fantasy of being raped. Further, he placed her address and phone number on the website. As a result, men came to her residence offering to rape her. In addition, I have a friend who is also my constituent who has been a victim of an impersonator that made her out to be a prostitute and placed her personal information on a website. Consequently, a man contacted her and she feared for her safety.

The Judiciary Committee amended the bill with broader language by taking out the “intent to cause bodily injury or reckless disregard of the risk of causing bodily injury” and replacing it with “intent to deceive, and harass, annoy, or alarm another, or in reckless disregard thereof, makes or causes to be made, a likeness of that other person which the person knows to be false.” This language would make it easier for victims to prosecute impersonators who not only causes potential harm to them but also deception, harassment, annoyance, and anything alarming.

As this bill moves to the Senate, I hope to see the text, “electronic transmissions” re-inserted into the bill to include impersonation being done on the Internet as well as other types of technology. Similarly, I tried to insert this language in Hawaii's harassment and stalking laws to protect people being victimized by perpetrators on the Internet and other types of technology. I will try to work on amending Hawaii's harassment stalking laws during the interim. Nonetheless, “electronic transmissions” can still be added to this bill as it moves through the legislative process.

House Bill 1162 is a fairness issue for business. It will amend our liquor tax laws to make it fairer for the spirit cooler industry. Hawaii laws define each category of alcohol and tax each category accordingly.

I have noticed that a number of my colleagues have mentioned that this bill would encourage under-age drinking. First of all, underage drinking is illegal. Second, beverage companies do not promote underage drinking. Third, the spirit cooler industry only represents 0.5 percent of the beverage industry, thus the demand for consumption for spirit coolers is tiny. Fourth, even when underage drinking occurs, beer is the drink of choice. According to a study done in 2000, published in “Reducing Underage Drinking: A Collective Responsibility,” more than one-half of males and more than one-third of females drank beer.

Fifth, I disagree that a lower tax on spirit coolers would result in more underage drinkers drinking hard liquor. If I was to base my debate on purely assumptions, than I would say spirit cooler drinkers are diverse because spirit coolers such as margaritas and pina coladas tend to be drinks of choice for professionals and older adults over a nice dinner. Furthermore, there is a big difference between drinking hard liquor such as rum and tequila versus watered down pina coladas and margaritas. Again if I were to base my debate on purely assumptions, I would say many spirit cooler drinkers drink pina coladas and margaritas because they do not like the harsh taste of hard liquor but enjoy the sweet flavorings of the spirit coolers instead.

So lets stick to the real issue of whether Hawaii's liquor tax laws are fair for all liquor industries? In 1986, the Legislature enacted Act 344, which included the definition of “cooler beverage,” as (1) a wine cooler containing wine and more than fifteen percent of added natural or artificial blending material, such as fruit juices, flavors, flavorings, or adjuncts, water (plain, carbonated, or sparkling), colorings, or preservatives, and which contains less than seven percent of alcohol by volume.

Also included in the “cooler beverage” category is malt beverage cooler, which contains beer and added natural or artificial blending material such as fruit juices, flavors, flavorings, colorings, or preservatives which contains less than seven percent alcohol. Cooler beverages, which contains less than seven percent alcohol are taxed at $0.85 per wine gallon, a little more than draft beer, which contains a little less alcohol than cooler beverages and are taxed at $0.54 per wine gallon.

Currently, spirit coolers are categorized with distilled spirits, where most of the hard liquor in that category contains twenty-four percent alcohol and above and are taxed at $5.98 per wine gallon. Spirit coolers are the only alcohol in that category that contains less than seven percent alcohol.

In 1986, the Legislature did not intend to tax wine coolers in the higher wine tax rates. Likewise, this Legislative body should not tax spirit coolers at the distilled spirits tax rate.

Rather, spirit coolers are like wine coolers and malt beverage coolers because they are all watered down with juices, flavoring, or water and contain less than seven percent alcohol. Therefore, like wine coolers and malt beverage coolers, spirit coolers should be included in the cooler beverage category and be taxed at $0.84 per wine gallon.

At times, it is interesting to see how we treat some of our businesses. They get criticized for using tax credits to leverage more investors to spend in Hawaii compared to what they would have spent without the tax credits. In this case, all the spirit cooler businesses ask is for a fair tax rate.

I want to thank my colleagues on both sides of the aisle who appreciate the amount of taxes businesses bring to our state coffers and understand the challenges of running a business. Many of us believe in treating people fairly. Well, we should also treat businesses fairly. After all, they pay for a lot of our government services.

This is another good pro-business bill. This bill will help Hoku Scientific, a Hawaii-based technology company, in building a facility in Kapolei. Hoku Scientific's fuel cell membrane technology will not just positively affect Hawaii, but potentially the world. Their technology will provide clean and efficient energy, and reduce our dependence on batteries and fossil fuel.

In regards to mechanics liens, Hawaii’s current law requires that any person or association of persons furnishing labor or material in the improvement of real property shall have a lien upon the improvements as well as upon the interest of the owner of the improvement in the real property. The law requires that an Application and Notice setting forth the amount of the claim, the labor or material furnished, and a description of the property be filed not later than forty-five days after the date of completion of the improvement against which it is filed.

It is a custom of the construction industry where the contractor and owner of the property agree to a conditional lien release because the owner wants too insure that there are no unknown material or services to the improvements. However, this situation leaves the contractor who signed a conditional lien release and did not receive his final payment from the owner without any lien right. To address this problem, House Bill 1166 provides an additional twenty days for the contractor to file a mechanics lien in a situation where the contractor has given a conditional release and the owner inspects his property improvements but still does not make final payment to the contractor.

House Bill 531 is a pro-business bill. This bill will help Hawaii’s small businesses by giving them the opportunity to receive low-interest loans. At the same time, the State will earn money through interest on the certificate of deposit purchases from the lending institutions.

Thank you Mr. Speaker.

Written remarks entered into the journal:

House Bill 531 will create a linked investment program, a concept that follows a program started in Iowa in 1986, initially as a horticultural and alternative crops loan program to help diversify Iowa’s agricultural-based economy, and since expanded to assist other businesses. The linked investments program operates on the premise that the State deposits its revenues with a financial institution under an agreement with the lender that the State will forego some interest earned on the deposits and the lender will make below market rate loans to qualified businesses.

Under the linked investment program, a person or enterprise proposing to engage in a business will apply to a lending institution, which will evaluate the proposal and qualify the borrower. The lending institution, after evaluating the proposal and determining that the proposed business is a sound viable proposal will certify the applicant as an eligible borrower under the linked investment program. The institution will then prepare a linked investment loan package and submit it to the Director of Finance. If the Director accepts the loan package, the State will buy a certificate of deposit for the loan amount from the lending institution.

The lending institution will pay an interest rate to the State for the certificate of deposit of not more than two percent below current market rates. The lending institution will lend the value of the deposit to an eligible borrower at a rate not more than the prime rate or seven and one-half percent a year, whichever is lower.

A linked investment certificate of deposit shall: (1) Earn a rate of interest of not less than two percent per annum; (2) Not be subject to a penalty for early withdrawal; and (3) Have a maturity of one year for the initial linked investment, which may be renewed for eight additional one-year periods. The term of the certificates of deposit shall not exceed one year, but may be renewed for eight additional one-year periods.

This measure will not expose state funds to losses from default. A certificate of deposit is a banker’s certificate acknowledging the receipt of money and promising to repay the depositor.

JON RIKI KARAMATSU · In my work as a lawyer, consultant, and entrepreneur, I enjoy building and expanding companies. In my past, I served eight years as a Hawaii State Representative; owned an Internet retail business for ten years; served four and a half years as a Deputy Prosecuting Attorney and Legislative Liaison for the Department of the Prosecuting Attorney, City and County of Honolulu; and produced campaign, cultural, and music events since 2002. As a lawyer, I advocate for entities that need new or amended rules, regulations, and/or statutes by drafting legislation, resolutions, and/or proposals, followed by written and oral testimonies before government bodies. I also assist companies with government incentives, special revenue bonds, government applications, government permits, public and private grants, proactive legal defense strategies, product and services development, marketing, public affairs, and media affairs. Further, I review, draft, and negotiate business agreements and documents. Every so often, I help clients in settling disputes through negotiation, mediation, and/or arbitration. Further, I'm a partner in a start-up aviation fixed-base operator company in Hawaii, which we plan to break ground in 2019. I enjoy creative writing as well, completing a paranormal, romance, historical, and suspense novel based in Hawaii during the 2000s that has been copyrighted and is being shopped around for representation. I'm currently writing my second novel, a historical, romance, and suspense story based in Iraq during the U.S. occupation and war.